Questions are taken in the Intermediate Accounting 2 edition 2020 Zeus Vernon Millan.

Question number 1: Kiner Equipment Company sells computer a 2 year warranty. During 2004 the company sold 700 comouters. Based on past experience, the company has estimated the total 2 year warranty cost as 40.00 for parts and 80.00 for labor. (Assume all sales occur at December 31, 2004 and warranty obligatios are expected to settled evenly throughout the warranty period).

In 2005, Kinder incurred actual warranty cost relarive to 2004 computer sales of 10,000.00 for parts and 24,000.00.

A. Under the expense warranty treatment, Give the entries to reflect the above transaction(accrual method) for 2004 and 2005.

B. Under the cash basis method, What are the warranty expense balances for 2004 and 2005?

C. The transactions of part (A) create what balance under current liabilities in 2004 balance sheet?

Question number 3: On January 1, 20x1 Restrain to Curb Co. issued 1, 000, P 2,000, 10%, 3 year bonds for 1,903,927.00. Principal is due on December 31,20x3 but interests are due annually every year end. The effective rate is 12%.

A. What are the pertinent entries?

Question number 3: An entity settled an outstanding note payable with face amount of 3,000,000.00 and an unamortized discount of 800,000 by transferring cash of 1,000,000.00 and land with fair value of 2,200,000.00 and carrying amount of 2,100,000.00.

A. What is the entry to record the derecognition of the note payable?

Question number 4: On march 1,2002 Pyne Furnuyure Co. issued 700,000 of 10% bonds to yield 8%. Interest is payable semiannually on February 28 and august 31. The bonds mature in 10 years. Pyne Furniture Co. is a Calendar year corporation.

A. What is the issue price of the bonds? Show computation.

B. What is the amortization table through the first two interest period using effective interest method.

C. What are the journal entries to record bond related transactions as of the following dates:

a.March 1,2002

b. August 31,2002

c.December 31,2002

d.February 28,2003(Assume no reversing entries are made)